Group 1: payal pachchigar(10MBA051)

Aditya Chate (10MBA011)

Ankita Kahar (10MBA035)
Navdeep Sahni (10MBA093)
Kinjal Shah (10MBA099)
 Facts of the case
YEAR EVENTS
1913 Accounting firm Andersen,DeLany
and Company came itno existence
1918 DeLany left the company and the
name changed to Arthur Andrsen
and Company
1928 Financial consulting practice
started
1947 Arthur passed away
Leonard Spacek took over as
successor of Arthur
1954 Co. developed a separate unit for
its consulting business
YEAR EVENTS
1990 Enron hired Andersen as their
accountants

1998 Waste Management Systems

scandal-client of Andersen

1999 Carl bass voiced concern over book

keeping and was dismissed along
with PSG (Professional Standards
Group)
2000 Formal separation of consulting
firm and formation of Accenture

2001 Jospeh Berarndino was sworned as

the new CEO of the Co.
SEC announced investigation of
Enron
 Define the central issue/
problem
 Where is the problem?
 Wrong Auditing practices
 Manipulation of Accounts

 Why is it a problem?
 Money-centered executives

 Identify the root cause

 More money was involved
 For whom and why? (Goal vs. Performance)

 Company because the problem affects their brand

image

 Clients because they have to find new auditors

 Potential Investors because they will have to reassess

their decision for investing in the clients companies

 Auditing and Accounting Industry as a whole because

it will decrease the number of firms in the auditing
industry.
 What are the consequences?

 Bankruptcy of client companies

 Affects the faith of the potential investors

 Top executives become rich

 Brand image is affected

 People employed will lose their job

 What information is lacking?

 Are the client companies Private or Public Ltd.

 Why Delany left the partnership

 Reasons for Anderson’s split up

 What were the problems for handling the new

constituency

 Unsuccessful in adopting new book keeping

system
 Identifying alternatives

 Training for new book keeping system

 Monitor and Control

 Transparency in system
Evaluation of alternatives

 Give training to employees before adopting new

system of accounting and auditing

 Set up a regulatory body to monitor and control

the events taking place in the company to avoid
manipulation of accounts

 Develop transparency in the system to avoid the

problem
Select the best alternative

 Monitor and control

 Transparency in the system